Campbell Considers Its Post-Recession Course

Earlier this month, Campbell Soup Co. reported a 22 percent drop in fourth-quarter profit, but that’s not stopping the soup giant from brewing up some more innovation. (Sales of condensed soup, for instance, were up 6 percent, but the quarter’s decline was mainly due to the loss of an extra week, European trademark write-downs and the effects of a stronger U.S. dollar, the company said.) In September alone, Campbell announced it had reformulated its Chunky and iconic tomato soup products to contain more vegetables and meat and lower sodium, respectively. These days, the soup giant is focused on overhauling and reintroducing some of its best-selling soups, said Andrew Brennan, vp and general manager for Campbell’s U.S. soup division. Brennan spoke with Brandweek about the company’s strategy. Here are some excerpts:

Brandweek: Campbell’s soup sales have been holding up relatively well in a recession. How much of that would you attribute to marketing, versus consumers just looking for affordable, eat-at-home options?
Andrew Brennan:  [Sales for] the whole year have actually been pretty strong [growth of 5 percent]. The good news is that it’s just not one part of our portfolio. The condensed business has been strong. Select Harvest had a great year last year and we launched a new stock product with Swanson that has done really well. I think it really is just the fact that we’ve been working a lot on making sure we have the right consumer insights and the right offerings. We’ve obviously spent more effort on [advertising] the inherent value of our products, so they’re top of mind among consumers. Our advertising focuses around Campbell’s soups being the “original dollar menu.” You can get a can of condensed soup and a meal for two for around a dollar.

BW: Consumers are still turning to comfort foods like soup and mac ’n’ cheese in tough times. What does that say about how far we are along the road to economic recovery? Do you see these rituals becoming permanent even after the recession is over?
AB: There will be some real structural changes to the way people look at their lives. We’re seeing them play out right now. Soup has been a top 10 lunch/dinner as far as the [NPD Group’s] annual “National Eating Trends” report goes. Three of our iconic products-tomato, chicken noodle and cream of mushroom-are also among the top 10 [fastest-moving items in U.S. dry grocery]. We’ve also taken efforts to make sure people don’t change their behaviors. We spent some time and energy advertising and investing behind some of our other cooking soups, such as French onion, which we haven’t featured in advertising for a while. We put that in some of our direct-response TV ads and saw double-digit growth on that product almost immediately. A lot of our cooking soups can be used in more than one recipe…so our advertising has been more focused on the versatility of these products—given that people are cooking at home more—as opposed to [highlighting] that one main dish at the end as the hero.

BW: We’re seeing brands like Sara Lee’s deli meats and Kraft’s Double Stuf Oreo make significant strides in social media. Where would you say Campbell’s soups are in their social media journey?
AB: We have started to get more involved in this recently…When we reformulated all 12 of our kids’ soups…to heart healthy levels, we hosted a session in March with some of the more popular mommy bloggers. We had them come here to our Campbell kitchens and they got to meet the chefs that actually helped develop those products and talked to them about how they did it. We had them sample the kids’ soups as well. We did a before and after, can you tell the difference sampling, and they were just blown away by the fact that we were able to reduce sodium to heart-healthy levels but still have great-tasting food. We got a lot of very positive spin on that launch as a result [of this program.]

BW: Name one poignant insight you’ve gleaned from Campbell’s visits to consumers in the past few months.
AB: Two weeks ago, I was in Oklahoma City, not the best part of town, just seeing people come in with their shopping lists—which we’re seeing a lot more people use on the [grocery store] floor these days. We were watching them making real-time trade-offs in the store and realizing they don’t have the money…to buy the things they want for their families today…One lady in particular, she ticked off some things on her shopping list, and put crosses through others, and I asked her what the check marks and crosses meant. The [former] were  things on her list she decided she would still buy. The crosses [were for items] she had gone around the store and looked at prices for, but the amount kept adding to her bill, and so, she decided she couldn’t buy them.

BW: What’s the biggest challenge for Campbell coming out of the recession? Is it the return of out-of-home dining?
AB: I don’t think it will be any different than what it was before the recession. As a company, we need to stay connected and close to consumers, and figure out not just what they need today, but what they need tomorrow, and to help them get there with not just soup, but, more broadly [speaking], with simple meals.